Wells Fargo has gotten hit with some big penalties from the Federal Reserve for its naughty ways. The Federal Reserve ordered the removal of four board members and the bank is not allowed to grow any bigger (than it already is) until it fixes the governance problems that led to widespread consumer abuse.
Chair Janet L. Yellen stated:
We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again.
Damn straight they do!
Wells Fargo stated that as part of its consent decree with the Federal Reserve it would submit a plan detailing how it would enhance its governance oversight within 60 days. The president and CEO of Wells Fargo, Timothy J. Sloan stated:
We take this order seriously and are focused on addressing all of the Federal Reserve’s concerns.
That has yet to be seen, but that’s just me. Sloan also stated,”While there is still more work to do, we have made significant improvements over the past year to our governance and risk management that address concerns highlighted in this consent order.”
In 2016 information came to light that there had been millions of sham accounts opened that customers didn’t ask for. Some of those customers were then charged with overdraft and other fees that harmed their credit scores. Immediate backlash from Capitol Hill occurred and forced former CEO John Stumpf to resign
Naughty, naughty Wells Fargo.
In spite of their repeated efforts to show critics, they were really, REALLY trying their problems have not gone away in the past year. Turns out, those fake accounts were going on much longer than what the bank originally said. It now says the employees created 3.5 million accounts rather than the two million it originally reported. They also said that for six years, 570,000 customers were charged for auto insurance that they didn’t need.
Some of those customers’ loans were sent to default and their cars were repossessed. Yeah, they just spread love and sunshine with every one of those fake accounts.
Fuck the fuck off Wells Fargo.